The taxation of a foreign citizen in Georgia is shaped by three pillars of the Tax Code: the 183-day residence test, the small business status for an individual entrepreneur and the respective rates. This page explains how days are counted, when a person becomes a resident and under what conditions the small business rates are used — a practical map for the relocation year and for the years that follow.
The 183-Day Residence Test
A natural person is considered a resident of Georgia for the entire current tax year where he or she actually stays on the territory of Georgia for 183 days or more in any continuous 12-month period ending in that tax year. The time of actual presence also includes the time during which the person left Georgia specifically for medical treatment, rest, a business trip or study.
At the same time, the time of actual presence does not include periods when the person stayed in Georgia as a person of diplomatic or consular status or as a family member of such a person; as an employee of an international organisation or a person in the state service of a foreign country, save for a citizen of Georgia; in transit from one foreign country to another; or for medical treatment or rest. A day of stay counts irrespective of its length, and days counted in a previous period are not taken into account in the next one. By special rules, residence may also be granted to a person endowed with significant property and, in a determined case, to a foreign citizen.
The Small Business Status
The small business status may be granted to an individual entrepreneur — an instrument designed for remote work and freelance income. The government, in agreement with the fiscal-budgetary committee of Parliament, may prohibit particular activities under this status and define types of income that are neither taxed nor counted toward the threshold — which is why planning of the status should begin with a verification of the current lists.
Rates and Thresholds
The taxable income of a person holding small business status is taxed at 1 percent. Where the aggregate income from economic activity exceeds 500,000 GEL, the taxable income is taxed at 3 percent — from the beginning of the month in which the excess over the threshold was recorded until the end of the calendar year; for subjects of wine tourism and agro-tourism activity the threshold is 700,000 GEL. This means that annual planning requires monitoring of income and a forecast of approach to the threshold.
In practice the day count is made precise by three details. First, the period must be continuous within a 12-month window ending in the tax year, and that window does not necessarily coincide with the calendar year — which matters for mid-year relocations. Second, leaving the country for treatment, rest, a mission or study counts as presence, which creates unexpected residence for mobile persons; while, conversely, staying in Georgia for treatment or rest does not accumulate days. Third, the status is determined anew for each tax period, and the days counted in the previous year are not carried into the next — a rhythm that must be reflected in a multi-year calendar rather than a one-off calculation.
The small business regime and residence do not meet once a year: the registration of individual entrepreneurship, the taking of the status and the monitoring of the threshold proceed by calendar. In the relocation year a person may be a non-resident for part of the year and a resident for another part, and that split is reflected in the sources of income as well. Building the tax calendar — with the months of declaration, the checkpoints of threshold control and the days of status review — is the work that must be completed before the moment of paying taxes; otherwise a person discovers the 3 percent rate only after exceeding the threshold, which creates an unexpected year-end picture.
Frequently Asked Questions
When do I become a resident?
Where you stay in Georgia for 183 days or more in any continuous 12-month period ending in the tax year.
Is a vacation counted?
Leaving Georgia for treatment, rest, a mission or study is counted as presence; staying in Georgia for treatment or rest is not.
What is the small business rate?
1 percent; above 500,000 GEL — 3 percent from the month of exceeding until the end of the year.
Can I take the status?
Only as an individual entrepreneur and taking the prohibited activities into account.
How We Help on Legal.ge
The lawyers of Legal.ge assist foreign citizens with a full plan of taxation in Georgia: we count the residence days with the relocation year in view, explain individual entrepreneurship and small business status, prepare the reporting and control the risks connected with the thresholds. Contact us — the right decision in the relocation year shapes the tax picture of the years that follow.